Buy a health insurance early in life

Medical Insurance or health Insurance is an insurance policy that ensures that you get cashless treatment or expenses reimbursement if you fall ill. However the insurance company will pay for your treatment if the medical condition is covered in the policy. As per IRDAI the premiums payable for the policy are tax deductible u/s 80D of the Income Tax Act. Currently medical expenses are skyrocketing, thus getting a health insurance is compulsory. Health insurance prevents a medical emergency from turning into a financial emergency.

One should buy a health insurance as early as possible in life even though they may not need it immediately instead of waiting for their old age.

1. As one gets older insurance companies subject buyers to a slew of medical tests before selling them a health plan. You can avoid these tests at a younger age.

2. Health insurance premiums like life insurance premiums keep increasing with age, thus if taken at a younger age you can save on premium & considering the tax benefits the cost may turn out to be very low for the amount of protection you enjoy.

3. Buying a policy when your health is good ensures that you have fewer pre-existing disease. As you get older the chances of contracting a medical condition goes up. Insurers either avoid some pre-existing medical conditions or charge a higher premium.

4. If you pay premiums without having to utilize your insurance you get a no- claim bonus. With no-claim years the extent of your medical cover increases (generally 5-10% every year upto a maximum of 50% of coverage). Buying early means you will have more no-claim years allowing you to accumulate the benefits.

5. Lastly and most importantly you should have your own health insurance cover even if your company provides you group medical insurance. This is because your company covers you as long as you are working there. What happens if you lose your job or something happens when you are changing jobs or your next company doesn’t cover you and most importantly what happens when you retire? You will have to pay an exorbitant amount to cover yourself if you take a policy when you retire. Thus it makes sense to have both a corporate group policy as well as an individual cover but utilize the group policy first and let the bonus accumulate on your individual policy.

Term insurance a must; But lowest premium not necessarily the best

Make life insurance an integral part of your financial plan….

Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 9 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata.He also manages a portfolio on the online platform Kristal. Find link to the strategy named 'The Tortoise' 

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